Multiple Chapters on "Strategic Planning in Private Hospitals"

Multiple Chapters 10 pages (3377 words) Sources: 15

[EXCERPT] . . . .

Strategic Planning for Private Hospitals

What is a Strategic Plan?

Dr. Dan Beckham explains strategic planning like this: "The allocations of scarce resources to your best opportunities" (Beckham, 2010, p. 6). Actually, he goes on, writing an editorial for the journal Trustee, strategic planning involves several things: one, what is most important to advance the quality of service in the hospital; two, designing a "systematic process" that helps lead seamlessly to the future. Strategic planning forces management to make choices, and, Beckham explains, that is what makes strategic planning "…both so difficult and so beneficial" because it "generates focus" (p. 6).

Typically a solid strategic plan for a hospital takes up to five years, Beckham writes, and albeit there is no one correct way to design a strategic plan, once it is in place "…a hierarchy of supporting decisions" must be made and aligned. According to Beckham -- who is president of a strategic consulting group, the Beckham Company -- approaching a strategic plan is generally done in five phases: a) collecting and analyzing information; b) defining the hospital's "critical issues"; c) developing an "overreaching vision"; d) carefully identifying the "tactics and actions" that will be part of the strategy; and e) making certain that the implementation is effective (p. 6).

Beckham stresses that the process must be based on the views and input of all the stakeholders, including the doctors. Speaking of doctors, Beckham says they are "the most credible voice in the strategic planning process when it comes to their needs" and of course the needs of the hospital's patients. Moreover, Beckham asserts that the doctors in the hospital going through the strategic planning process should not assume that the hospital's executive team understands the importance of the strategic planning process. Often executives know operational issues backwards and forward, but they may not relate to strategic planning, hence, communication between staff (especially the physicians) and executives is vital.

Literature Review

On the subject of board members and executive staff at a hospital, Corey Christman writes that the hospital board is "…an essential component" of the strategic planning process but too often the board becomes "an untapped resource for the marketing department" (Christman, 2007, p. 1). For the marketing department, Christman insists that while they don't generally align with board members, in the case of putting together a strategic plan marketing staff "…should take the time to understand [their] responsibilities, investigate their interests, and get to know their areas of expertise" (p. 1).

Granted, Christman continues, it's the managers and the CEO that put the strategic plan together, but the board should be involved because it is "ultimately responsible" for the plan that is produced (p. 1). Also, it is becoming more and more common for marketing staffers in a hospital to actually have time before the board "…to report and explain what they're doing and what their marketing initiatives are" since marketing and strategic planning is pivotal in terms of the well-being of hospitals in the competitive marketplace, Christman writes (p. 3).

Christman references the views of Alan Zuckerman, president of Health Strategies & Solutions, Inc., in Philadelphia. Zuckerman says there are three aspects to the board's responsibilities vis-a-vis strategic planning. The first is to provide "…policy development" that helps to define and continue the mission of the hospital; the second is to offer direction, input, and advice to the hospital's leadership and "…to give voice to the various stakeholders they represent"; the third aspect is to "provide oversight" to the whole hospital by listening and responding to employees' "ideas, proposals, and recommendations" (Christman, 2007, p. 3).

Older Strategic Planning Issues -- Remarkable Similarities with 2010's Issues

Striking a chord similar to Christman -- albeit 25 years earlier -- is professor R.K. Ready of the University of West Florida, who writes in Health Care Management Review that the hospital CEO needs the "…information, insight, and plain hard work of…the board of trustees, medical staff and administrative staff" (Ready, et al., 1982, p. 27). So there is really nothing new under the sun for hospitals in terms of their need to work as a unit when preparing strategic plans. Ready explains that there was in 1982 a lot of complaining in hospitals; medical staff complains that the administration "does not listen to them"; the board complains that programs and spending they are asked to approve "…are fragmented and difficult to appraise"; administrative staff complain that CEOs give them responsibilities "…but not authority"; and "everybody complains about regulation" (p. 27).

Historically, Ready continues, hospital planning has been "filled with trial and error" due to the above-mentioned grievances along with the fact that "positive incentives" for strategic planning by hospitals have been few and far between (p. 27). But after pointing out the flaws and drawbacks, Ready offers advice in his article that is timeless and should be taken into account by all hospitals -- private and public, nonprofit and for profit -- in 2010. That is, a hospital "has a continuing need to look good" through the eyes of the board, patients, "benefactors, local government and the community at large," Ready asserts. And an obvious way -- then and now -- to look good is "…to announce plans from time to time." Those plans should be tied to bold strategic planning. The plans should not just PR fluff, but real declarations of "purpose" tied to "very broad, long-range goals" that are difficult to disagree with, Ready writes (p. 30).

Another way to explain these broad, long-range goals that Ready suggests are important can be announced in the form of a "wish" list, which gives "the illusion of structure" even though the strategic plan is not firmly in place (p. 30). That list shows the public that the hospital "…is at the forefront of the industry" and has a continuing need for "the support and generosity of the community," Ready continues. From there, the nuts and bolts of a real meaningful strategic plan must be carved out, with all stakeholders as participants, according to Ready.

As noted in the paragraphs above, the need to invoke strategic planning projects for hospitals is certainly not new, as Ronald L. Zallocco and colleagues explain in the Journal of Health Care Marketing (Zallocco, 1984, p. 19). The need in 1984 for strategic changes -- particular in tax-exempt hospitals -- resulted from problems similar to those experienced in 2010: a) changing reimbursement patters (due to Medicare changes like reimbursement ceilings); b) increased competition from "for-profit and multi-hospital systems" as well as urgent care centers, hospices, geriatric outpatient care centers and "outpatient ancillary group practice"); and c) demographic changes (changing age mix and population shifts) (Zallocco, 1984, p. 19).

It is interesting that twenty-six years ago hospital administrators had not only begun pursuing "…innovative, even bold, management and marketing solutions," but that hospital administrators were adapting strategies that, as Zallocco writes, "…are striking in their similarity to techniques used in business firms" (p. 19). The author almost sounds naive when he writes that emulating the strategic planning for hospitals is logical because "…there is much similarity in the problems faced by businesses and by hospitals today" (p. 19). Someone probably told Zallocco after reading his piece that hospitals are in fact businesses and need to be run as businesses, not as unique healthcare institutions somehow impervious to market changes and functioning as an island apart from other service-related businesses.

In 1992, "information technology" (it) was a fairly new concept, but hospitals needed to be totally up to speed on it then as surely as they need to now (Henderson, 1992, p. 72). While there is little doubt that it has evolved by giant leaps and bounds subsequent to 1992, the issues remain largely the same when it comes to upgrading it in a hospital, hence the relevance of Henderson's narrative on it. Henderson explains that when hospitals are embracing a strategic alignment of their technologies -- which is an ongoing process in 2010 for many hospitals -- management necessarily must ask the following questions: a) How do we get doctors and nurses up to speed on using the newest cutting edge it? b) What are the 2 or 3 "emerging information technologies" that are critical to our hospital's strategy? c) What supporting applications, architectures, and communication capabilities do we need to make our strategic plan fully functional? And d) What training will our professionals need to make sure we have the skills to fully utilize new it we are putting in place? (p. 72).

Along with the questions posed above, when it-themed strategic planning is underway, Henderson suggests these pivotal issues be confronted by hospitals: One, does our hospital contract out for it services or do we design and maintain the systems ourselves? Number two: does our hospital align with another healthcare organization to bring it services online? And three has our hospital engaged in discussions as to our it business strategy and the linkage with strategically structured it positioning within our various components? (pp. 74-75).

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